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Canada’s economy picked up speed in the first quarter of 2013,growing at the fastest pace in a year an a half, led by a surge in exports. The annualized growth rate was 2.5% between January and March, Statistics Canada said Friday. That was slightly better than many economists’ forecasts, reports the Financial Post‘s Gordon Isfeld. For March alone, gross domestic product edged up by just 0.2% — still better than expectations of 0.1% gain. “While Canada’s economy packed on a few more pounds than expected in Q1, it’s still stuck in slim-growth mode,” said Douglas Porter, chief economists at BMO Capital Markets. “We don’t expect a break-out in Q2, but a firming U.S. consumer-housing backdrop points to slighter healthier gains later this year and into 2014.”

New Gold Inc agreed on Friday to acquire gold exploration company Rainy River Resources Ltd for about $310 million in a bid to expand its asset base in Canada. New Gold is offering 0.5 of a New Gold common share for each Rainy River share tendered, or $3.83 in cash. It said the offer represents a premium of 42% over Rainy River’s closing price on the Toronto Stock Exchange on Thursday. Toronto-based Rainy River owns the gold project of the same name located in northwestern Ontario. The project has about 4 million ounces in proven and probable gold reserves and some 6.2 million ounces in measured and indicated gold resources.

Protesters blocked the entrance to the European Central Bank in Frankfurt, saying the ECB’s policy choices during the euro-area debt crisis shored up big banks while impoverishing citizens. Organizers of the Blockupy movement said the number of demonstrators on site Friday already exceeded the 3,000 who took part in last year’s event, among them protesters from Italy, Spain, France and other European countries. Frankfurt police put the number at about 1,500 demonstrators. Employees were prevented from entering the ECB building in the city center, Ani Diesselmann, a Blockupy spokeswoman, said in a telephone interview.

OPEC stands pat on output targets

OPEC oil exporters, basking in the market’s equilibrium, agreed to leave output policy unchanged on Friday as oil held around the group’s preferred level of $100 a barrel. The Organization of the Petroleum Exporting Countries will retain its 30 million barrels per day (bpd) production target for the rest of this year, said Venezuelan Oil Minister Rafael Ramirez, after a swift meeting at OPEC headquarters. The group is due to gather again on December 4.

Don’t get shorty on the banks

For the big, swinging hedge funds south of the border it must have seemed like a no brainer. The Canadian housing market is a bubble set to pop so why not short the banks that hold the mortgages? It’s no secret that short interest in the sector has soared in recent months and now sits close to an all-time high for some lenders. But those investors may want to reconsider their bets as Royal Bank of Canada and Canadian Imperial Bank of Commerce reported higher profits for the second quarter, on the back of strong performance from their domestic retail operations, writes the Financial Post‘s John Greenwood. In the face of a cooling housing market, mortgage lending has been slowing for several quarters, but still the banks’ businesses appear to be strong. And it’s certainly not falling off a cliff, as some doomsayers predicted.

It’s no secret that it pays to work in banking. That’s especially true if you are the chief executive at one of Canada’s top banks. Canadian bankers were among the highest-paid banking executives in North America last year, with three in the Top 10, according to a new list compiled by Bloomberg Markets magazine. In all, six Canadian bank CEOs were in the Top 20, led by the Royal Bank of Canada’s Gordon Nixon, who came in at No. 4. Nixon’s total pay package was US$12.6 million in 2012 according to the listings, up 25% from the year before, when he was in eighth place. Bank of Nova Scotia’s Richard Waugh was bumped down one spot to seventh place, with US$11.1 million, followed by TD Bank’s Ed Clark, who was No. 8 on the list with US$10.8 million. The Bloomberg Markets magazine rankings also put Nixon, Waugh and Clark among some of the most overpaid CEOs when comparing compensation to a bank’s average asset, stock performance and return on equity.

China is counting on “breakthroughs in energy trade” with Canada to help fuel economic growth in the world’s most populous country, one of the country’s top diplomats said Thursday, writes the Financial Post‘s Jeff Lewis. Speaking to a Calgary business crowd, Zhang Junsai, China’s ambassador to Canada, said his country is prepared to “deepen” ties with Canada on infrastructure development to help move the country’s oil and natural gas to the West Coast for export. China’s state-backed energy companies “are watching the development of infrastructure, including pipelines of oil, pipelines of gas,” he said, addressing a question from the floor. So long as there are no political obstacles, “definitely they will come and invest into that.” He declined to elaborate or take questions from reporters. China’s state-backed companies have poured US$30-billion into Canada’s oil sands and natural gas assets as of the end of last year, he said in prepared remarks. The total includes a portion of the $100-million Enbridge Inc. raised from a group of producers and refiners to help usher its $6.6-billion Northern Gateway pipeline through the regulatory process.

Tesla Motor Inc.’s massive share rally over the past few months is turning heads on equity markets these days, but stodgy General Motors Co. may give investors a smoother, more profitable ride in the months ahead, writes the Financial Post‘s David Pett. “Both are in uptrends,” said Greg Newman, a senior wealth advisor at The Newman Group, a division of ScotiaMcLeod Inc. in Toronto. “But GM is not expensive at the moment and has a good chance of rewarding investors from here, while the odds of Tesla doing the same are speculative.” Tesla’s shares have climbed more than 200% since the beginning of 2013, closing Thursday up 0.3% at US$104.95. Shares in GM, which went bankrupt in 2009, have climbed almost 20% so far this year and 50% over the past year, finishing Thursday up 1.7% at US$34.64. Much of Tesla’s lift can be attributed to a recent string of positive news, including its first-ever quarterly profit and a glowing review in Consumer Reports that gave the Tesla Model S a 99/100 score, the best auto test rating it has ever awarded.

Related: From New York to L.A., sans gas – Bloomberg

Back to the start

Microsoft Corp. is restoring some old Windows features and rolling out new ones in a bid to reignite interest in its flagship operating system, after customers complained about the software’s usability. Windows 8 debuted in October for tablets and personal computers with a tile-based layout for selecting programs, replacing a desktop design that let users start programs from a button. An update later this year will restore the start button, while adding search capabilities and other features, said Jensen Harris, director of program management for Windows. Microsoft, which redesigned its main product to appeal to users switching to mobile, touch-based computing, has failed to jump-start growth in the ailing PC market with Windows 8. While tweaking designs and adding features will help, Microsoft needs more applications running on Windows and a greater variety of low-cost machines to stem the defection of consumers to tablets.

Ah, the lofty and often unrealistic expectations of the young and disenfranchised, particularly in the venture capital world, where young Canadian entrepreneurs tend to suffer from an “unrealistic expectation of values,” according to WIND Mobile CEO Anthony Lacavera, reports the Financial Post‘s Matthew Braga. Speaking on a panel of Canadian venture capitalists Wednesday afternoon, Mr. Lacavera stressed a need for better education of young entrepreneurs – but also a need to “break through that culture of risk aversion” that plagues Canadian VCs, who don’t act nearly as fast or aggressively as those in the U.S. The panel, organized by the Empire Club of Canada, was moderated by 680 News senior business editor Mike Eppel. It included Amar Varma, co-Founder and chief executive of Xtreme Labs, and managing partner of Extreme Venture Partners; Anthony Lacavera, chairman and chief executive of WIND Mobile; John Ruffolo, chief executive of OMERS Ventures; and Michael Bloom, vice president of organizational effectiveness and learning at The Conference Board of Canada.

Underneath the groves that make southern Italy the world’s second-largest olive oil producer, geologists have found a more lucrative liquid: Europe’s biggest onshore crude oil fields. Basilicata, a mountainous, sparsely populated province that sits in the arch of Italy’s boot, holds more than 1 billion barrels, offering the country a weapon to fight a two-year recession. Rome-based Eni SpA and France’s Total SA plan to double production raising Italy’s output to almost 200,000 barrels a day, making the country Europe’s third-largest oil producer behind the U.K. and Norway. Since the fields started production in the 1990s, their development has been held back by environmental campaigns and bureaucratic delays. Those impediments are falling away, analyst Carlo Stagnaro said, because the priority for Italy’s government is kickstarting an economy that’s shrunk for six straight quarters and where more than 35% of young people are unemployed. “This is a giant field, so there’s huge potential here,” Claudio Descalzi, Eni’s head of exploration and production and president of Italy’s Oil and Mining Industry Association told Bloomberg News. Italy spends as much as 60-billion euros (US$78-billion) on oil and boosting production can save about 5 billion euros and create around 20,000 jobs, he said.

Related: Europe awash with quality oil as U.S. imports fall – Reuters

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